Fortnightly - thermoelectrichttp://www.fortnightly.com/tags/thermoelectric
enAmerica’s Energy Future: So Who Are the Good Guys?http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys
<div class="field field-name-field-import-deck field-type-text-long field-label-inline clearfix"><div class="field-label">Deck:&nbsp;</div><div class="field-items"><div class="field-item even"><p>Not just ‘all of the above,’ but ‘how much of each?’</p>
</div></div></div><div class="field field-name-field-import-byline field-type-text-long field-label-inline clearfix"><div class="field-label">Byline:&nbsp;</div><div class="field-items"><div class="field-item even"><p>Harvey L. Reiter</p>
</div></div></div><div class="field field-name-field-import-bio field-type-text-long field-label-inline clearfix"><div class="field-label">Author Bio:&nbsp;</div><div class="field-items"><div class="field-item even"><p><b>Harvey L. Reiter</b> (<a href="mailto:hreiter@stinson.com">hreiter@stinson.com</a>) is a partner with Stinson Morrison Hecker LLP, and serves as executive articles editor for the <span class="s1"><i>Energy Law Journal</i></span>.</p>
</div></div></div><div class="field field-name-field-import-volume field-type-node-reference field-label-inline clearfix"><div class="field-label">Magazine Volume:&nbsp;</div><div class="field-items"><div class="field-item even">Fortnightly Magazine - October 2013</div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><p>For proponents of a clean energy economy, identifying the “good guys” is no easy task. </p>
<p>Teaching a course in energy law and regulation at Vermont Law School a few summers ago, this author posed several questions to students about their views on clean energy. The students, almost to a one, had chosen the school for its environmental law program and their personal interest in a green future. And they brought to the classroom their own conceptions about who the good guys are in the energy economy. They came away, one hopes, with the understanding that identifying the good guys can prove immensely complicated – even where the policy goal (to promote clean energy) seems unambiguous.</p>
<p>The students grappled with a number of questions. What did they think about the importance of energy from wind? From solar? What of conservation? Of energy efficiency? Energy storage technology? Aren’t efficiency, conservation and storage all as green as renewable energy? These were all good things to be promoted, they said. But do they compete with one another and, if so, are some worth subsidizing over others? Are any worth subsidizing? Their answers to these questions were more equivocal. And the class, conducted several years ago, didn’t even touch on the more recent fracking debate or the explosive growth in oil production in North Dakota or from tar sands in Canada. But if the class were taught today, the list of questions would logically grow. Is hydraulic fracturing safe? Will it reduce carbon emissions? Should we be promoting its use to replace coal in power plants or oil in motor vehicles? Will it retard or hasten the arrival of a clean energy economy? How will the availability of cheap natural gas for transportation affect the development of electric or hybrid vehicles? How important is North American energy independence? If oil is going to be consumed anyway, is it better to rely on domestic sources? Can they help make us greener in the long run or will they slow progress?</p>
<p>Regulators, law makers, environmentalists, consumer advocates and energy industry participants will be asked these and similar questions if they aren’t already posing the questions themselves. And if they are conscientious, they will struggle for answers.</p>
<h4>What is Green Anyway?</h4>
<p>The broad and even overwhelming scientific consensus states that manmade carbon emissions are accelerating global warming.<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C9#1" title="1. William D. Nordhaus, A Question of Balance: Weighing the Options on Global Warming Policies, Yale University Press 2008, Chapter 1.">1</a></sup></b> But it isn’t just the climate change skeptics who have questioned the merits of the various strategies proposed to reduce the size of our global carbon footprint. As a society, we might well agree on the need to meet defined levels of CO<b><sub>2</sub></b> reductions or the related goal of domestic energy independence,<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C9#2" title="2. Advocates for US energy independence, for example, frequently argue for improving energy efficiency and increased energy conservation as means to reduce reliance on imported fossil fuels. See, e.g., “A National Strategy for Energy Security” (2012), www.secureenergy.org, (accessed July 5, 2013). They’ve also advocated electrification of our transportation networks. Ronald E. Minsk, Sam P. Ori and Sabrina Howell, “Plugging Cars into the Grid: Why the Government Should Make a Choice,” 30 Energy L. J. 317 (2009).">2</a></sup></b> yet disagree – and vigorously – on how to get there.</p>
<p>Many states, for example, have chosen to adopt renewable portfolio standards (RPS). These rules can mandate a generation mix for utilities that must include certain percentages of identified renewable resources by a date certain.<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C9#3" title="3. Twenty-nine states and the District of Columbia have adopted some form of renewable portfolio standard. Warren Leon, “The State of State Renewable Portfolio Standards,” p.1, CleanEnergy States Alliance, www.cleanenergystates.org, accessed July 23, 2013. The European Union has had a renewable portfolio standard since 2001.">3</a></sup></b> This strategy will have the effect of reducing carbon use to the extent renewable generation displaces generation that consumes more carbon.</p>
<p>Suppose, however, that some resources are considered more renewable than others. In California, local utilities must attain certain targets for renewable energy portfolios, but renewable generation located outside the state counts less – or not at all – toward those targets<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C9#4" title="4. California Senate Bill 2 (2011).">4</a></sup></b> Similarly, the state has developed a “low carbon fuel standard” that applies to “any transportation fuel … sold, supplied or offered for sale in California,” but that measures carbon intensity by including the amount of carbon used to produce and transport the fuel to California.<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C9#5" title="5. LCFC Cal. Code Regs. Tit. 17 § 95380. This, some out of state power producers have argued, not only raises questions of unfairness, but may violate the Constitution’s Commerce and Supremacy clauses. See Rocky Mountain Farmers Union v. Goldstene, 719 F.Supp. 2d 1170 (E.D. Calif. 2010); Pacific Gas &amp; Electric Co., 137 FERC ¶ 61,192 at P22 (2011); Joint Response of the Alliance for Retail Energy Markets and Retail Energy Supply Association in Support of Application for Rehearing of Cowlitz County PUD before the California Public Utilities Commission, Decision No. D11-12-052 (February 6, 2012). But also see Rocky Mountain Farmers Union v. Corey, No. 12-15131 (9th Cir. Sept. 18, 2013) (2-1 decision rejecting claim of facial Commerce Clause violation).">5</a></sup></b> So, for example, a gallon of ethanol produced in Brazil would have a higher carbon intensity than an otherwise identical gallon produced in California. In both the RPS and carbon standard cases, the apparent goal isn’t simply to reduce carbon emissions, but to promote in-state development of renewable resources and the boost it might give to the local economy. </p>
<p>In certain other states, large-scale hydroelectric projects – both existing and new – don’t qualify at all as “renewable.” Yet hydroelectric power serves as the quintessential example of a physically renewable resource: it rains, the rain evaporates, the water vapor condenses, and the cycle starts all over again. Policymakers in some states, though, have decided that counting existing hydroelectric projects toward renewable energy targets would give an insufficient incentive to utilities to expand their use of renewable resources – particularly in areas with plentiful hydropower resources. The argument for disqualifying new large-scale hydro is more difficult. Smaller-scale renewable energy resources, even small-scale hydro, often can’t compete with far lower cost large-scale hydroelectric plants. And most of the potential for large-scale hydroelectric projects isn’t in the United States, but in Canada.<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C10#6" title="6. See David Coen, “Should Large Hydroelectric Plants be Treated as Renewable Resources, 32 Energy L.J. 541 (2011); Mary G. Powell, “Treatment of Large Hydropower as a Renewable Resource,” 32 Energy L.J. 553 (2011).">6</a></sup></b> So disqualifying these projects serves not simply to reduce carbon emissions, but to protect nascent, homegrown renewable energy producers. Who are the good guys in that debate?</p>
<p>Here’s a more fundamental question. Are renewable energy portfolio standards – even those that are neutral as between various types of renewable resources – the best way to reduce carbon emissions? Economists generally agree that the best way to reduce carbon emissions is to tax them.<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C10#7" title="7. See, e.g., William D. Nordhaus, “Dealing with Climate Change:What Are the Major Options? (November 2008), www.eba-net.org (accessed July 5, 2013); William G. Gale, “Carbon Taxes as Part of the Fiscal Solution,” Brookings Institute, March, 2013.">7</a></sup></b> But the political terrain for a carbon tax is treacherous.<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C10#8" title="8. See, e.g., Kate Ackley, “K Street Files: Manufacturers, Citing Job Losses, Opposed Carbon Tax,” Roll Call, Feb. 26, 2013.">8</a></sup></b> Even in the most prosperous of times, it’s far easier to pursue a public policy goal through regulation or tax credits and deductions than through an actual tax.</p>
<p>Short of a carbon tax, some economists would argue there are other, more efficient ways to reduce the use of fossil fuels in the production of energy than through RPS.<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C10#9" title="9. See Karen Palmer and Dallas Burtraw, “Cost Effectiveness of Renewable Electricity Policies,” Resources for the Future, January 2005.">9</a></sup></b> Holding utilities to a carbon output standard, for example, in lieu of a renewable portfolio standard, would allow utilities to reduce carbon use through means other than increasing deployment of certain renewable technologies. One means of limiting carbon output is through a cap-and-trade mechanism, such as that employed by the EPA for years to limit SO2 emissions. Under cap and trade, utilities would fall subject to emission limits; those utilities exceeding their emission limits could buy allowances from other utilities with a surplus to spare. Legislation that would adopt cap and trade died in Congress in 2008<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C10#10" title="10. Eric Pooley, “Why the Climate Bill Failed,” Time, June 9, 2008.">10</a></sup></b> but the EPA arguably has authority to establish a cap-and-trade regime by regulation.<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C10#11" title="11. Massachusetts v EPA, 549 U.S. 497 (2007).">11</a></sup></b></p>
<p>The president recently directed the EPA to establish carbon emission limits for existing power plants.<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C10#12" title="12. Evan Lehman and Christa Marshall, “Obama’s Climate Plan will Limit Emissions from Power Plants and Heavy Trucks,” Scientific American, June 25, 2013.">12</a></sup></b> But while it’s unclear whether the EPA would opt for a cap-and-trade approach, other means are available to implement carbon usage limits. Under a carbon use standard, utilities could promote greater energy conservation or greater use of energy efficiency technologies (such as LED lighting, superconductivity technologies to reduce line losses, etc.). Switching from coal to natural gas (retaining some reliance on new fossil-fueled generation) might also count toward meeting carbon use reduction targets. Improvements in efficiency and conservation might also serve. Many utilities have argued, however, that if they’re compensated based on their sales levels, they will have inadequate incentives to promote conservation and efficiency, as such measures would necessarily reduce their sales. Maximizing efficiencies, they maintain, will turn on whether the state regulators allow rate decoupling – mechanisms by which utilities are compensated both for the energy they sell and for achieving reductions in customer usage of electricity, particularly during peak periods.<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C10#13" title="13. David Boonin, “A Rate Design to Encourage Energy Efficiency and Reduce Revenue Requirements,” National Regulatory Research Institute ( July 2008), http://nrri.org, accessed July 8, 2013. The National Association of Regulatory Utility Commissioners defines decoupling as “a rate adjustment mechanism that separates (decouples) an electric or gas utility’s fixed cost recovery from the amount of electricity or gas it sells.” “Decoupling for Electric and Gas Utilities: Frequently Asked Questions,” 2007, www.naruc.org, accessed July 8, 2013.">13</a></sup></b> Decoupling can take a variety of forms. A number of state regulators have implemented policies permitting decoupling.<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C10#14" title="14. Richard Sedano, “Decoupling Utility Sales from Revenues,” Report for the Kentucky Public Service Commission, Regulatory Assistance Project, April 2009.">14</a></sup></b></p>
<p>This carbon output standard also would allow the utilities to devise the mix of renewable resources and other strategies that would reduce carbon use at the lowest cost. Does the flexibility and short term cost of this approach make proponents of a carbon output strategy the good guys? What if there was evidence that, given an increase in demand for renewable resources (which an RPS, by definition, produces), the cost curve for these resources would decline sharply and that an RPS would accelerate this development? Policymakers might then prefer to minimize reliance on gas-fired generation, even if it has a lower carbon impact than coal or oil. The accelerated development of lower-cost solar or wind resources, prompted by an RPS, might shorten the transition period from fossil-fired to carbon-free generation. Would opting for an RPS over a carbon output standard be a rational choice for policymakers in these circumstances? </p>
<h4>Wind vs. Solar: Taking Sides?</h4>
<p> Deciding what’s green and what isn’t is difficult enough. But deciding what will best promote clean energy may involve making choices even among similar green alternatives. Wind generation offers a case in point. Maryland recently passed legislation, long promoted by Governor O’Malley, to subsidize development of 200 MW of offshore wind capacity. Residential ratepayers will pay an additional $1.50 per month and businesses will pay a 1.5-percent surcharge per month.<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C10#15" title="15. Aaron C. Davis, “O’Malley wins three-year battle over subsidy for offshore wind industry,” Washington Post, March 9, 2013. http://www.washingtonpost.com/local/md-politics/omalley-wins-three-year-battle-over-subsidy-for-offshore-wind-industry/2013/03/08/09c0e22a-881c-11e2-999e-5f8e0410cb9d_story.html, Washington Post, March 9, 2013.">15</a></sup></b> Will it promote the use of clean energy? Well, that depends.</p>
<p>Will the subsidy borne by ratepayers allow wind to develop even if solar is cheaper? If so, is that a green outcome? Will the cost of the legislation make it more difficult for legislators already facing budget constraints to call on ratepayers also to subsidize energy conservation or energy efficiency programs? If these programs are market-driven they will have to compete with wind resources. Could development of other, possibly more efficient green technologies be retarded as a result? Or will the wind subsidy serve to jumpstart offshore wind, increase economies of scale, lower costs and produce jobs in the long term, as the Governor hopes?<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C10#16" title="16. This is the theory discussed in a February 2013 study by the Brattle Group. Jurgen Weiss, Mark Sarro and Mark Berkman, “A Learning Investment-based Analysis of the Economic Potential for Offshore Wind: The Case of the United States,” www.brattlegroup.com (accessed July 13, 2013).">16</a></sup></b> How is this equation affected by the availability of low-cost natural gas produced from shale deposits? Will the subsidy be enough to achieve its intended result? </p>
<p>In passing the legislation, Maryland lawmakers are betting that the benefits of potential job creation and lower carbon usage will outweigh any a long-term detrimental consumer impact from higher rates. Lawmakers in other jurisdictions might reach different, but equally plausible conclusions. By asking the right questions, though, they improve the odds that they can reach clean energy goals without materially sacrificing efficiency. </p>
<p>Even like sources of renewable energy can compete with each other, posing still other difficult policy questions for regulators.</p>
<p>Several years ago wind project developers and others in the Great Plains argued, vociferously, for a federal rate-making policy that would favor large-scale transmission projects to move wind power to the Northwest and the Northeast. The idea was to spread the cost of these new lines across entire regions, among utilities and their customers. Socializing the costs in this way, they insisted, would be necessary to get the transmission built and to make the wind resources economic. But regulators, legislators and others in the destination regions balked. These projects, they complained, were uneconomic. Subsidizing them would come at the expense of competing offshore wind projects that were closer to load and wouldn’t require the same investment in long-distance transmission. Not only did the idea of socializing large wind-related transmission projects stall, it prompted some legislators to propose bills that would have barred transmission funding that wasn’t tied to proportionate consumer benefits.<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C10#17" title="17. Peter Behr, “Battle Lines Harden Over New Transmission Policy for Renewables,” New York Times, Feb. 26, 2010, www.nytimes.com (accessed July 13, 2013).">17</a></sup></b> And while the Federal Energy Regulatory Commission’s Order No. 1000, issued in 2011, did ease the way somewhat for broad allocation of new grid project costs, the Order expressly precludes allocation of the costs of interregional transmission projects without the consent of each of the affected planning regions.<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C10#18" title="18. FERC Order No. 1000, FERC Stats. &amp; Regs. ¶ 31,323 at P 400 (2011), (appeals pending), South Carolina Public Service Authority, et al. v. FERC, Nos 12-1232 et al (D. C. Cir).">18</a></sup></b></p>
<p>Offshore wind projects face additional obstacles. Like onshore wind, they need subsidies to survive, particularly given the drop in natural gas prices.<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C10#19" title="19. Earlier this year Congress extended the Production and Incentive tax credits to wind power producers. Without these breaks, many have argued that construction of new wind projects would slow to a trickle, supported only by RPS requirements in various states. “Blown Away: Wind Power is doing well, but it still relies on irregular and short-term subsidies,” The Economist, June 8, 2013.">19</a></sup></b> But they also face environmental objections from landowners, naturalists and fisherman, as was the case with the Cape Wind project off the shore of Cape Cod. And they’re difficult to construct. So-called “jack-up” ships are needed to transport and install offshore wind turbines but the U.S. doesn’t have any, although a New Jersey company, Weeks Marine, hopes to have its first in use by 2014.<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C12#20" title="20. Tim McDonnell, “Top 4 Reasons the US Still Doesn’t Have a Single Offshore Wind Turbine,” Climate Desk, February 28, 2013.">20</a></sup></b> Still, it makes sense to pose the same questions when comparing offshore wind projects to other renewable, efficiency, and conservation alternatives, and when comparing such projects to more distant onshore wind projects.</p>
<h4>Greens and Consumers: BFFs?</h4>
<p>Just as the climate change debate can pit one technology against another, so too has it made adversaries of traditional allies, like environmentalists and consumer advocates. As environmentalists have championed wind power and the associated grid infrastructure, a number of environmental groups have come to favor transmission rate incentives for new transmission. Consumer advocates, meanwhile, have criticized FERC policies granting rate-of-return adders for new transmission as needlessly expensive rewards for doing what utilities were likely to do anyway and, in some cases for building transmission, they were already obligated by contract to construct.<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C12#21" title="21. Policy Statement, Promoting Transmission Investment Through Pricing Reform, 141 FERC ¶ 61,129 (2012).">21</a></sup></b> So who are the good guys in this skirmish? Consumer groups seem to be making headway in convincing environmentalists to look at costs and rates. A handful of environmental groups recently have joined consumer advocates in counseling FERC against heeding utility calls to make its rate-of-return policies more generous.<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C12#22" title="22. The Conservation Law Foundation, Climate + Energy Project, Earthjustice, Natural Resources Defense Council and Sierra Club’s Beyond Coal Campaign all joined in a July 12, 2013 letter from industrial electric users, municipal utilities, rural electric cooperatives and various state consumer advocate offices addressed to FERC and filed in FERC Docket No. RM13-18, Petition of WIRES for Statement of Policy and June 2013 Edison Electric Institute Report on Transmission Rates of Return on Equity.">22</a></sup></b> Whether environmental groups will find common cause with consumer interests on the shale gas revolution is still an open question.</p>
<h4>Shale Gas: Bridge to Nowhere? </h4>
<p>Geologists and petroleum engineers have long known that shale formations, found throughout the United States and other parts of the world, hold large deposits of natural gas. But until the last decade and advances in the combined use of horizontal drilling and hydraulic fracturing these deposits have been economically unrecoverable. The availability of inexpensive natural gas supplies from shale – between 2003 and 2012 prices per Btu fell from $20 to $3 – has dramatically changed the energy landscape. It has, for the most part, made new coal-fired electric generation uneconomic<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C12#23" title="23. Henry D. Jacoby, Francis M. O’Sullivan and Sergey Paltsev, “The Influence of Shale Gas on U.S. Energy and Environmental Policy,” Economics of Energy &amp; Environmental Policy, Vol. 1 at 37-51 (2012)">23</a></sup></b> and if the price differential persists (oil is currently six times as expensive as natural gas),<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C12#24" title="24. Vicki Ekstrom, “A Shale Gas Revolution?” MIT News, Jan. 3, 2012.">24</a></sup></b> it’s also likely to encourage more fuel switching by homeowners and vehicle operators from fuel oil and gasoline to natural gas. Most significant in terms of carbon impact, burning natural gas produces about half the CO<b><sub>2</sub></b> emissions of either oil or coal.</p>
<p>So what are the difficult questions consumer advocates, environmentalists, policy makers, regulators, and consumers should be asking about producing gas from shale? T. Boone Pickens has famously argued that moving from oil to natural gas for our transportation needs will provide a necessary bridge to a renewable-based energy system. Some environmental groups have warned that reliance on any fossil-fuel will instead prevent society from making the changes necessary to eliminate reliance on fossil fuels. Still others have warned that uncertainties about the safety of fracking – groundwater contamination, seismic disturbances, adequacy of water treatment facilities, warrant a halt to further development. Taking this view, the State of Vermont, which has only limited shale gas potential, enacted a moratorium on its development. </p>
<p>The answer likely lies somewhere in between abandoning this fuel source and a full-speed-ahead approach. MIT economist Henry Jacoby sees big advantages to the economy over the next few decades from shale gas. The 2012 report he coauthored projects it creating thousands of jobs, lowering energy prices and driving “conventional coal out of the system.”<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C12#25" title="25. Ibid., Jacoby.">25</a></sup></b> “But,” he says, “it is so attractive that it threatens the other energy resources we ultimately will need.”<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C12#26" title="26. Mason Inman, “Shale gas has transformed the U.S. Energy Landscape in the past several years—but may crowd out renewable energy and other ways of cutting greenhouse gas (GHG) emissions, a new study warns,” National Geographic News, Jan. 17, 2012.">26</a></sup></b> For one thing, lower energy costs will boost energy consumption, “yielding more emissions than if shale remained uneconomic.”<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C12#27" title="27. MIT Report at 44.">27</a></sup></b> This effect won’t only make coal uneconomic, but it will make various forms of renewable energy and conservation efforts uneconomic as well. The MIT report estimates that, without other changes in policy, use of renewables to meet energy needs would never exceed RPS minimums as a result of the availability of natural gas from shale. And it would delay the date that carbon capture and storage would become economic for fifteen years. The good news, the report says, is that the lower energy costs from use of shale gas can help finance the transition to an energy economy not based on finite fossil fuels. And it offers this sage advice: Don’t let shale gas become a crutch instead of a bridge. </p>
<h4>Pipelines or Trains?</h4>
<p>To borrow a phrase from the pre-digital era, journalists, consultants and others have spilled a lot of ink addressing the merits and downsides of the Keystone XL Pipeline, a project to bring Canadian oil from tar sands to US refineries in Texas and Louisiana.<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C12#28" title="28. Andrew Mayeda and Theophilos Argitis, “Harper Seeks to Build Keystone XL Support on U.S. Visit,” www.bloomberg.com (accessed July 8, 2013).">28</a></sup></b> The debate, if not the answer, is pretty straightforward. </p>
<p>Keystone proponents argue that thousands of jobs in the U.S. and Canada will be lost if the pipeline isn’t built. Denying a permit, they add, won’t reduce carbon emissions from this source of oil nor prevent environmental degradation around the exploration site; the oil will be produced anyway and will simply be sold by the Canadians on the world market through other ports.<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C12#29" title="29. Tennile Tracy, “Pipeline vs. Train Safety in Focus After Quebec Incident,” Wall Street Journal, July 8, 2013.">29</a></sup></b> Canadian oil, they add, will reduce US reliance on energy from Venezuela and the Middle East. </p>
<p>Opponents, by contrast, have maintained that extraction and transportation of the oil will itself pose environmental hazards and that, in any event, our government shouldn’t be endorsing the export of oil from tar sands because bitumen oil from these sources produces more greenhouse gases and other adverse environmental impacts than conventional oil.<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C12#30" title="30. Mayeda and Argitis, supra; Cameron Jeffries, “Unconventional Bridges over Troubled Water – Lessons to Be Learned from the Canadian Oil Sands as the United States Moves to Develop the Natural Gas of the Marcellus Shale Play,” 33 Energy L.J. 75 (2012).">30</a></sup></b> Some voice concern that making this oil available domestically will slow expanded use of electric vehicles. Still others argue that the U.S. shouldn’t allow the transportation of oil, period. <b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C12#31" title="31. “The answer is there’s no safe way to move this oil around,” said Eddie Scher, spokesman for the Sierra Club. “What we need to do is to get the hell off oil.” Stephen Mufson, “Canadian train disaster sharpens debate on oil transportation,” Washington Post, July 8, 2013.">31</a></sup></b></p>
<p>Just as oil from Canadian tar sands promises to reduce U.S. reliance on oil imported from outside North America, so too have large oil finds in North Dakota made the US a potential exporter of fossil fuels.<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C12#32" title="32. “The Experts: How the U.S. Oil Boom Will Change the Markets and Geopolitics,” Wall Street Journal, March 27, 2013.">32</a></sup></b> Lacking the pipeline capacity to market their North Dakota oil outside of the Great Plains and the Midwest, North Dakota oil producers have argued that the absence of a facility like Keystone is depressing the prices they receive because they can’t market their oil into the Southwest or Gulf coast states, where prices are higher.<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C12#33" title="33. This is the same argument being made by the Canadian government and Canadian crude oil producers. Mayeda and Argitis, supra.">33</a></sup></b> This is the same concern voiced by Canadian bitumen oil producers.</p>
<p>Nearly lost in the Keystone controversy are two other developing phenomena – the increased use of rail transportation to move Canadian and North Dakota oil and the largely undiscussed development of a competing oil pipeline network by Enbridge and their combined potential impact on the environmental debate. These developments promise to render the Keystone debate – but not other environmental debates – irrelevant.</p>
<p>Over the last five years, rail carriers in the U.S. and Canada have greatly expanded their capacity to handle crude oil shipments. They do this by adding rail cars and running them more frequently, not by adding new tracks. The Railway Association of Canada has estimated that its members will ship up to 140,000 carloads of crude oil this year – compared to only 500 carloads in 2009.<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C12#34" title="34. Crude by Rail, www.railcan.ca (accessed July 8, 2013)">34</a></sup></b> U.S. shipments of oil by rail have jumped just as dramatically, from 9,500 carloads in 2008 to 233,811 carloads in 2012.<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C12#35" title="35. Tennile Tracy, “Pipeline v. Train Safety in Focus After Quebec Accident,” Wall Street Journal, July 8, 2013.">35</a></sup></b></p>
<p>The significance of expanded rail shipments of oil is this: oil can and is being moved using existing rights of way. So issues such as wetland disturbances, stream crossings (the Keystone pipeline involve over 200 such crossings), scenic impacts and pipeline safety associated with citing new pipeline facilities, as well as the delays in obtaining governmental permission to operate new pipeline facilities, aren’t factors. </p>
<p>All this is not to say that shipments of crude by rail pose no safety or environmental risks of their own. Oil spills from pipelines or offshore facilities can have widespread catastrophic consequences, like those resulting from BP’s offshore disaster in April 2010 or the Enbridge oil spill into the Kalamazoo River the same year. Spills from rail cars are more frequent– twice as frequent says the American Action Forum. Still, because oil is stored in individual tank cars, the overall damage is usually less severe. But that isn’t always the case. A recent rail car derailment in Quebec, for example, killed 40 people, spilled oil from over 70 tanker cars and forced 2000 people from their homes in the small town of Lac-Megantic – “the fourth freight train accident in Canada under investigation involving crude oil shipments since the beginning of the year.”<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C12#36" title="36. Rob Gilles and Charmaine Noronha, “40 Still Missing in Deadly Canada Oil Train Crash,” (AP July 8, 2013)">36</a></sup></b></p>
<p>On one hand, the railroads can point correctly to a very good overall safety record – the American Association of Railroads boasts a 99.997 percent hazmat safe delivery rate. As the use of existing rail lines expands to move more oil, however, the chance of accidents necessarily increases. As one commenter put it, “The rail lines in North Dakota were not built for this kind of traffic.”<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C12#37" title="37. Rusty Braziel, “Ridin the Bakken Slow Rail,” RBN Energy, February 1, 2012, www.rbnenergy.com (accessed July 14, 2012).">37</a></sup></b></p>
<p>Canada’s Prime Minister has touted Keystone as an environmentally superior (and cheaper) alternative to shipping oil by rail.<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C12#38" title="38. Mayeda and Argitis, supra, n. 16; “Rail Weighed Against Keystone XL,” May 17, 2013 (UPI) (www.upi.com) accessed July 8, 2013.">38</a></sup></b> Rail proponents argue that oil shipments by rail have less of an impact on the environment. To the extent proponents of domestic and Canadian oil are correct that, Keystone or not, their product will be sold somewhere, policy makers and even environmental advocates would benefit from considering whether shipments by rail might be more or less environmentally benign than shipments by pipeline. </p>
<p>Also largely undiscussed in the popular press are the ambitious plans of another Canadian pipeline company, Enbridge, to expand the capacity of its existing network. In 2009 Enbridge completed construction of its Southern Access Pipeline, bringing 400,000 barrels per day of crude oil from Alberta’s tar sands deposits to U.S. refineries around Chicago. With additional pumping stations, Enbridge states that it will be able to transport 1.2 million barrels daily. And its Alberta Clipper line, finished in 2010, moves 450,000 barrels a day to the U.S., but can be expanded to transport 800,000. To put this in perspective, the expansion of capacity on these two Enbridge facilities is more than the entire 800,000 capacity of the Keystone XL pipeline.<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C12#39" title="39. Lisa Song, “Canadian energy giant Enbridge is quietly building a 5,000-mile network of new and expanded pipelines that would achieve the same goal as the Keystone,” InsideClimate News, June 3, 2013, www.insideclimatenews.org (accessed July 14, 2013).">39</a></sup></b> These expansions, together with the expanded transportation of oil by rail would render the debate about whether to authorize Keystone academic. </p>
<h4>Water Use: A Wildcard</h4>
<p>Coal-and gas-fired power plants produce CO<b><sub>2</sub></b>, the latter significantly less than the former. Nuclear power plants produce no carbon emissions. But all of them produce power through a thermoelectric process – they all use steam heat to run turbines. And they use more water to cool the plants. Lots of it. So while the proponents of natural gas and nuclear power are right to tout the advantages they possess over coal as a source of carbon emissions, policymakers would be remiss to ignore the long-term implications of expanded thermoelectric power sources to produce electricity on our water resources. </p>
<p>Writing in the <i>Energy Law Journal</i> several years ago, Prof.Benjamin Sovacool noted that the operations of thermoelectric plants in virtually every region of the country have had to be suspended or curtailed and that water use permits for still others have been denied outright because “they would deplete much needed freshwater for drinking and irrigation.” <b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C12#40" title="40. Benjamin Sovacool, “Running On Empty: The Electricity-Water Nexus And The U.S. Electric Utility Sector,” 30 Energy L. J. 11, 12 (2009).">40</a></sup></b> Between 1950 and 2000, he added, water use associated with conventional thermoelectric power plants increased fivefold. His point is that a shortage of water, not necessarily a concern about climate change, would drive utilities to replace thermoelectric power plants with renewable resources and increased conservation efforts. It’s a point that’s hard to dismiss out of hand. The Department of Energy estimates that 60 percent of existing coal-fired power plants are located in regions of “water stress.” Indeed, its July 11, 2013 report – <i>U.S. Energy Sector Vulnerabilities to Climate Change and Extreme Weather – </i>warns that higher temperatures associated with global warming will only exacerbate the already serious water usage problem.<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C12#41" title="41. “U.S. Energy Sector Vulnerabilities to Climate Change and Extreme Weather,” Department of Energy, July 11, 2013, p. 24.">41</a></sup></b> Utilities, consumers and regulators are increasingly likely to take the water factor into account.</p>
<h4>It’s All Good – and Bad</h4>
<p>The notion that the United States can’t achieve either energy independence or effectively combat climate change without an all-of-the-above strategy is hardly novel. It embraces the proposition that America should pursue not only expansion of renewable energy production, but encourage conservation, energy efficiency, clean coal, nuclear power, electric storage, and natural gas exploration. But a little of this and a little of that isn’t an energy strategy. All-of-the-above is valuable only as a conclusion drawn from examining the interrelationship between various energy independence and climate change strategies – their short- and long-term impacts and both their political and economic feasibility. Whether, and if so, how and how much to subsidize one approach will invariably affect the success of other approaches.<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C12#42" title="42. The Treasury Department recently asked the National Academy of Sciences to look at one aspect of the issue, the conflicting impacts of various tax policies on greenhouse gas (GHG) emissions. The study found that the aggregate effect of existing oil and gas depletion allowances, home efficiency tax credits, nuclear decommissioning tax preferences and production tax credits for renewable energy on GHG emissions, though difficult to measure, has largely been a wash. William D. Nordhaus, Stephen A. Merrill and Paul T. Beaton, “Effects of U.S. Tax Policy on Greenhouse Gas Emissions,” National Research Council 2013.">42</a></sup></b></p>
<p>Shale gas can make us energy independent. It can reduce carbon emissions by replacing coal and oil. But that doesn’t mean we shouldn’t foster renewables. After all, fossil fuel sources are finite and we’ll eventually need to rely on non-carbon based energy sources.</p>
<p>Wind is carbon-free, yet hasn’t increased its market penetration without RPS, tax credits, or other direct and indirect subsidies. But that doesn’t mean we should subsidize it at the expense of other renewable resources. Renewables, on the other hand, generally can reduce our carbon footprint, but if we subsidize them without caution, we may retard conservation efforts or improvements in energy efficiency. Coal is uneconomic compared to natural gas, is dirtier and produces higher CO<b><sub>2</sub></b> emissions, and carbon capture requirements would make it even less competitive with natural gas. But should we abandon efforts to find economic means to capture and store CO<b><sub>2</sub></b> and make coal clean because the payoff is far down the road and costly to pursue? Will water shortages impede the development of carbon capture technologies – which require water “to strip CO<b><sub>2</sub></b> from the flue gas?”<b><sup><a href="http://www.fortnightly.com/fortnightly/2013/10/america%E2%80%99s-energy-future-so-who-are-good-guys?page=0%2C12#43" title="43. July 11, 2013 DOE Report, supra, at p. 25.">43</a></sup></b> Nuclear power, too, can reduce carbon emissions, but is there a politically palatable solution to the waste storage problem that would allow greater reliance on nuclear power? And if the waste storage problem is solved, is there enough water available to support significant expansion of nuclear generation? Policymakers and industry participants interested in making the right decisions will grapple with all of these difficult questions.</p>
<h4>Endnotes:</h4>
<p><a name="xxxx" id="xxxx"></a>1. William D. Nordhaus, <i>A Question of Balance: Weighing the Options on Global Warming Policies</i>, Yale University Press 2008, Chapter 1.</p>
<p><a name="2" id="2"></a>2. Advocates for US energy independence, for example, frequently argue for improving energy efficiency and increased energy conservation as means to reduce reliance on imported fossil fuels. <i>See, e.g</i>., “A National Strategy for Energy Security” (2012), <a href="http://www.secureenergy.org">www.secureenergy.org</a>, (accessed July 5, 2013). They’ve also advocated electrification of our transportation networks. Ronald E. Minsk, Sam P. Ori and Sabrina Howell, “Plugging Cars into the Grid: Why the Government Should Make a Choice,” 30 <i>Energy L. J.</i> 317 (2009).</p>
<p><a name="3" id="3"></a>3. Twenty-nine states and the District of Columbia have adopted some form of renewable portfolio standard. Warren Leon, “The State of State Renewable Portfolio Standards,” p.1, CleanEnergy States Alliance, <a href="http://www.cleanenergystates.org">www.cleanenergystates.org</a>, accessed July 23, 2013. The European Union has had a renewable portfolio standard since 2001.</p>
<p><a name="4" id="4"></a>4. California Senate Bill 2 (2011).</p>
<p><a name="5" id="5"></a>5. LCFC Cal. Code Regs. Tit. 17 § 95380. This, some out of state power producers have argued, not only raises questions of unfairness, but may violate the Constitution’s Commerce and Supremacy clauses. <i>See</i> <i>Rocky Mountain Farmers Union v. Goldstene</i>, 719 F.Supp. 2d 1170 (E.D. Calif. 2010);<i> Pacific Gas &amp; Electric Co., </i>137 FERC ¶ 61,192 at P22 (2011); Joint Response of the Alliance for Retail Energy Markets and Retail Energy Supply Association in Support of Application for Rehearing of Cowlitz County PUD before the California Public Utilities Commission, Decision No. D11-12-052 (February 6, 2012). <i>But also see Rocky Mountain Farmers Union v. Corey</i>, No. 12-15131 (9th Cir. Sept. 18, 2013) (2-1 decision rejecting claim of facial Commerce Clause violation).</p>
<p><a name="6" id="6"></a>6. See David Coen, “Should Large Hydroelectric Plants be Treated as Renewable Resources, 32 <i>Energy L.J.</i> 541 (2011); Mary G. Powell, “Treatment of Large Hydropower as a Renewable Resource,” 32 <i>Energy L.J.</i> 553 (2011).</p>
<p><a name="7" id="7"></a>7. See, e.g., William D. Nordhaus, “Dealing with Climate Change:What Are the Major Options? (November 2008), <a href="http://www.eba-net.org">www.eba-net.org</a> (accessed July 5, 2013); William G. Gale, “Carbon Taxes as Part of the Fiscal Solution,” Brookings Institute, March, 2013.</p>
<p><a name="8" id="8"></a>8. See, e.g., Kate Ackley, “K Street Files: Manufacturers, Citing Job Losses, Opposed Carbon Tax,” <i>Roll Call</i>, Feb. 26, 2013.</p>
<p><a name="9" id="9"></a>9. See Karen Palmer and Dallas Burtraw, “Cost Effectiveness of Renewable<br />Electricity Policies,” Resources for the Future, January 2005.</p>
<p><a name="10" id="10"></a>10. Eric Pooley, “Why the Climate Bill Failed,” <i>Time</i>, June 9, 2008.</p>
<p><a name="11" id="11"></a>11. <i>Massachusetts v EPA</i>, 549 U.S. 497 (2007)</p>
<p><a name="12" id="12"></a>12. Evan Lehman and Christa Marshall, “Obama’s Climate Plan will Limit<br />Emissions from Power Plants and Heavy Trucks,” <i>Scientific American</i>, June 25, 2013.</p>
<p><a name="13" id="13"></a>13. David Boonin, “A Rate Design to Encourage Energy Efficiency and Reduce Revenue Requirements,” National Regulatory Research Institute ( July 2008), <a href="http://nrri.org">http://nrri.org</a>, accessed July 8, 2013. The National Association of Regulatory Utility Commissioners defines decoupling as “a rate adjustment mechanism that separates (decouples) an electric or gas utility’s fixed cost recovery from the amount of electricity or gas it sells.” “Decoupling for Electric and Gas Utilities: Frequently Asked Questions,” 2007, <a href="http://www.naruc.org">www.naruc.org</a>, accessed July 8, 2013.</p>
<p><a name="14" id="14"></a>14. Richard Sedano, “Decoupling Utility Sales from Revenues,” Report for<br />the Kentucky Public Service Commission, Regulatory Assistance Project, April 2009.</p>
<p><a name="15" id="15"></a>15. Aaron C. Davis, “O’Malley wins three-year battle over subsidy for offshore wind industry,” <i>Washington Post</i>, March 9, 2013. <a href="http://www.washingtonpost.com/local/md-politics/omalley-wins-three-year-battle-over-subsidy-for-offshore-wind-industry/2013/03/08/09c0e22a-881c-11e2-999e-5f8e0410cb9d_story.html">http://www.washingtonpost.com/local/md-politics/omalley-wins-three-year-...</a>, Washington Post, March 9, 2013.</p>
<p><a name="16" id="16"></a>16. This is the theory discussed in a February 2013 study by the Brattle Group. Jurgen Weiss, Mark Sarro and Mark Berkman, “A Learning Investment-based Analysis of the Economic Potential for Offshore Wind: The Case of the United States,” <a href="http://www.brattlegroup.com">www.brattlegroup.com</a> (accessed July 13, 2013).</p>
<p><a name="17" id="17"></a>17. Peter Behr, “Battle Lines Harden Over New Transmission Policy for Renewables,” <i>New York Times</i>, Feb. 26, 2010, <a href="http://www.nytimes.com">www.nytimes.com</a> (accessed July 13, 2013).</p>
<p><a name="18" id="18"></a>18. FERC Order No. 1000, FERC Stats. &amp; Regs. ¶ 31,323 at P 400 (2011), (appeals pending),<i> South Carolina Public Service Authority, et al. v. FERC</i>, Nos 12-1232 et al (D. C. Cir).</p>
<p><a name="19" id="19"></a>19. Earlier this year Congress extended the Production and Incentive tax credits to wind power producers. Without these breaks, many have argued that construction of new wind projects would slow to a trickle, supported only by RPS requirements in various states. “Blown Away: Wind Power is doing well, but it still relies on irregular and short-term subsidies,” <i>The Economist</i>, June 8, 2013.</p>
<p><a name="20" id="20"></a>20. Tim McDonnell, “Top 4 Reasons the US Still Doesn’t Have a Single Offshore Wind Turbine,” <i>Climate Desk</i>, February 28, 2013.</p>
<p><a name="21" id="21"></a>21. Policy Statement, <i>Promoting Transmission Investment Through Pricing Reform</i>, 141 FERC ¶ 61,129 (2012).</p>
<p><a name="22" id="22"></a>22. The Conservation Law Foundation, Climate + Energy Project, Earthjustice, Natural Resources Defense Council and Sierra Club’s Beyond Coal Campaign all joined in a July 12, 2013 letter from industrial electric users, municipal utilities, rural electric cooperatives and various state consumer advocate offices addressed to FERC and filed in FERC Docket No. RM13-18, Petition of WIRES for Statement of Policy and June 2013 Edison Electric Institute Report on Transmission Rates of Return on Equity.</p>
<p><a name="23" id="23"></a>23. Henry D. Jacoby, Francis M. O’Sullivan and Sergey Paltsev, “The Influence of Shale Gas on U.S. Energy and Environmental Policy,” <i>Economics of Energy &amp; Environmental Policy</i>, Vol. 1 at 37-51 (2012)</p>
<p><a name="24" id="24"></a>24. Vicki Ekstrom, “A Shale Gas Revolution?” <i>MIT News</i>, Jan. 3, 2012.</p>
<p><a name="25" id="25"></a>25. <i>Ibid.</i>, Jacoby.</p>
<p><a name="26" id="26"></a>26. Mason Inman, “Shale gas has transformed the U.S. Energy Landscape in the past several years—but may crowd out renewable energy and other ways of cutting greenhouse gas (GHG) emissions, a new study warns,” <i>National Geographic News</i>, Jan. 17, 2012.</p>
<p><a name="27" id="27"></a>27. <i>MIT Report</i> at 44.</p>
<p><a name="28" id="28"></a>28. Andrew Mayeda and Theophilos Argitis, “Harper Seeks to Build Keystone XL Support on U.S. Visit,” <a href="http://www.bloomberg.com">www.bloomberg.com</a> (accessed July 8, 2013).</p>
<p><a name="29" id="29"></a>29. Tennile Tracy, “Pipeline vs. Train Safety in Focus After Quebec Incident,” <i>Wall Street Journal</i>, July 8, 2013.</p>
<p><a name="30" id="30"></a>30. Mayeda and Argitis, <i>supra</i>; Cameron Jeffries, “Unconventional Bridges over Troubled Water – Lessons to Be Learned from the Canadian Oil Sands as the United States Moves to Develop the Natural Gas of the Marcellus Shale Play,” 33 <i>Energy L.J.</i> 75 (2012).</p>
<p><a name="31" id="31"></a>31. “The answer is there’s no safe way to move this oil around,” said Eddie Scher, spokesman for the Sierra Club. “What we need to do is to get the hell off oil.” Stephen Mufson, “Canadian train disaster sharpens debate on oil transportation,” <i>Washington Post</i>, July 8, 2013.</p>
<p><a name="32" id="32"></a>32. “The Experts: How the U.S. Oil Boom Will Change the Markets and Geopolitics,” <i>Wall Street Journal</i>, March 27, 2013.</p>
<p><a name="33" id="33"></a>33. This is the same argument being made by the Canadian government and Canadian crude oil producers. Mayeda and Argitis, <i>supra</i>.</p>
<p><a name="34" id="34"></a>34. Crude by Rail, <a href="http://www.railcan.ca">www.railcan.ca</a> (accessed July 8, 2013)</p>
<p><a name="35" id="35"></a>35. Tennile Tracy, “Pipeline v. Train Safety in Focus After Quebec Accident,” <i>Wall Street Journal</i>, July 8, 2013.</p>
<p><a name="36" id="36"></a>36. Rob Gilles and Charmaine Noronha, “40 Still Missing in Deadly Canada Oil Train Crash,” (AP July 8, 2013)</p>
<p><a name="37" id="37"></a>37. Rusty Braziel, “Ridin the Bakken Slow Rail,” RBN Energy, February 1, 2012, <a href="http://www.rbnenergy.com">www.rbnenergy.com</a> (accessed July 14, 2012).</p>
<p><a name="38" id="38"></a>38. Mayeda and Argitis, <i>supra</i>, n. 16; “Rail Weighed Against Keystone XL,” May 17, 2013 (UPI) (<a href="http://www.upi.com">www.upi.com</a>) accessed July 8, 2013.</p>
<p><a name="39" id="39"></a>39. Lisa Song, “Canadian energy giant Enbridge is quietly building a 5,000-mile network of new and expanded pipelines that would achieve the same goal as the Keystone,” InsideClimate News, June 3, 2013, <a href="http://www.insideclimatenews.org">www.insideclimatenews.org</a> (accessed July 14, 2013).</p>
<p><a name="40" id="40"></a>40. Benjamin Sovacool, “Running On Empty: The Electricity-Water Nexus And The U.S. Electric Utility Sector,” 30 <i>Energy L. J.</i> 11, 12 (2009).</p>
<p><a name="41" id="41"></a>41. “<i>U.S. Energy Sector Vulnerabilities to Climate Change and Extreme Weather</i>,” Department of Energy, July 11, 2013, p. 24.</p>
<p><a name="42" id="42"></a>42. The Treasury Department recently asked the National Academy of Sciences to look at one aspect of the issue, the conflicting impacts of various tax policies on greenhouse gas (GHG) emissions. The study found that the aggregate effect of existing oil and gas depletion allowances, home efficiency tax credits, nuclear decommissioning tax preferences and production tax credits for renewable energy on GHG emissions, though difficult to measure, has largely been a wash. William D. Nordhaus, Stephen A. Merrill and Paul T. Beaton, “Effects of U.S. Tax Policy on Greenhouse Gas Emissions,” National Research Council 2013.</p>
<p><a name="43" id="43"></a>43. July 11, 2013 DOE Report, <i>supra</i>, at p. 25.</p>
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<div class="field field-name-field-sidebar-title field-type-text field-label-above"><div class="field-label">Sidebar Title:&nbsp;</div><div class="field-items"><div class="field-item even">Third Coast Wind</div></div></div><div class="field field-name-field-sidebar-body field-type-text-long field-label-above"><div class="field-label">Sidebar Body:&nbsp;</div><div class="field-items"><div class="field-item even"><!--smart_paging_autop_filter--><!--smart_paging_filter-->The general public tends to associate offshore wind projects with windmills anchored in the oceans. But there are thousands of megawatts of wind power generation under development in the Great Lakes. And the Great Lakes, as freshwater bodies, are a better environment for wind power: they don’t face ocean tides or the corrosive effect of salt water.
Ontario’s feed-in tariff obligates utilities to pay offshore wind projects 19 Canadian cents per kWh with a 20-percent escalator, a stimulus that prompted applications for 20,000 MW of wind power in 2010 alone. The National Renewable Energy Laboratory estimates that there’s more potential for wind power development on the U.S. side of the Great Lakes than on either of the coasts. (Elisa Wood, “Offshore Awakening: US Investment Flows to Offshore Wind,” Renewable Energy World, March 22, 2010.) –H.L.R.</div></div></div> </div>
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<div class="field field-name-field-sidebar-title field-type-text field-label-above"><div class="field-label">Sidebar Title:&nbsp;</div><div class="field-items"><div class="field-item even">Green Can Be Dirty</div></div></div><div class="field field-name-field-sidebar-body field-type-text-long field-label-above"><div class="field-label">Sidebar Body:&nbsp;</div><div class="field-items"><div class="field-item even"><!--smart_paging_autop_filter--><!--smart_paging_filter-->Even the most renewable of energy sources pose environmental issues. Wind farms can affect migratory bird patterns, they affect the visual landscape and, because they’re typically located remote from population centers, they engender the construction of large scale transmission projects that can disturb wetlands or pose other environmental hazards. Large solar installations are land intensive and, if they don’t use more expensive dry cooling can annually sap millions of gallons of critical water resources. This is a little written about, but particularly nettlesome problem, since the best locations for large scale solar power – the sunny, dry regions of the West – are also those likely to be the lowest on water. (Todd Woody, “Water Use by Solar Projects Intensifies,” New York Times, Oct. 27, 2009.) And large scale hydroelectric projects can affect fisheries and wildlife as well as displace populations as lands are flooded around the dam site.–H.L.R.</div></div></div> </div>
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<div class="field field-name-field-sidebar-title field-type-text field-label-above"><div class="field-label">Sidebar Title:&nbsp;</div><div class="field-items"><div class="field-item even">Science and National Culture</div></div></div><div class="field field-name-field-sidebar-body field-type-text-long field-label-above"><div class="field-label">Sidebar Body:&nbsp;</div><div class="field-items"><div class="field-item even"><!--smart_paging_autop_filter--><!--smart_paging_filter-->For decades France has relied on nuclear power to supply its electricity needs. It reprocesses nuclear fuel, reducing by 90 percent the storage space needed to store spent fuel. The population is convinced of the science and the safety of nuclear technology. But you can’t convince the French to purchase baguettes made with bioengineered wheat. Bioengineered food, by contrast, can be found in virtually any U.S. supermarket, but we can’t reach political consensus on where to store nuclear waste. In both cases it isn’t a matter of science, but of culture. Germany has embraced feed-in tariffs, under which consumers pay, not for the market price of electricity, but for the specific – and often quite high – costs of producing varying types of renewable energy. Roughly 70 percent of the renewable energy produced in that country is purchased by local utilities under feed-in tariffs. While a handful of states in this country have adopted limited feed-in tariffs, it’s questionable whether Americans, generally, would be willing to pay the high prices for renewable energy that would result from a large scale feed-in tariff program.–H.L.R.</div></div></div> </div>
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<div class="field field-name-field-sidebar-title field-type-text field-label-above"><div class="field-label">Sidebar Title:&nbsp;</div><div class="field-items"><div class="field-item even">Intermittency and Reliability</div></div></div><div class="field field-name-field-sidebar-body field-type-text-long field-label-above"><div class="field-label">Sidebar Body:&nbsp;</div><div class="field-items"><div class="field-item even"><!--smart_paging_autop_filter--><!--smart_paging_filter-->A modest RPS target is unlikely to have a significant impact on the rates consumers pay for electricity. But as the renewable portfolio percentage gets higher and the date for achieving the standard gets closer, the difficulty in integrating variable resources like wind and solar energy into the utility’s portfolio mix while simultaneously maintaining reliability, could place some upward pressure on consumer rates. Larger reserves likely will be needed to achieve reliability targets. This, in turn, probably will trigger demand-management measures to mitigate the need for new capacity. (See Karen Palmer and Dallas Burtraw, “Cost Effectiveness of Renewable Electricity Policies,” Resources for the Future, Jan. 2005.)–H.L.R.</div></div></div> </div>
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</div></div></div></div></div><div class="field field-name-field-article-category field-type-taxonomy-term-reference field-label-above clearfix"><h3 class="field-label">Category (Actual): </h3><ul class="links"><li class="taxonomy-term-reference-0"><a href="/article-categories/energy-policy-legislation">Energy Policy &amp; Legislation</a></li><li class="taxonomy-term-reference-1"><a href="/article-categories/generation-markets">Generation &amp; Markets</a></li></ul></div><div class="field field-name-field-members-only field-type-list-boolean field-label-above"><div class="field-label">Viewable to All?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-article-featured field-type-list-boolean field-label-above"><div class="field-label">Is Featured?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-image-picture field-type-image field-label-above"><div class="field-label">Image Picture:&nbsp;</div><div class="field-items"><div class="field-item even"><img src="http://www.fortnightly.com/sites/default/files/1310-FEA4.jpg" width="1500" height="658" alt="" /></div></div></div><div class="field field-name-field-fortnightly-40 field-type-list-boolean field-label-above"><div class="field-label">Is Fortnightly 40?:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-law-lawyers field-type-list-boolean field-label-above"><div class="field-label">Is Law &amp; Lawyers:&nbsp;</div><div class="field-items"><div class="field-item even"></div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-above clearfix">
<div class="field-label">Tags:&nbsp;</div>
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<a href="/tags/clean-energy">Clean energy</a><span class="pur_comma">, </span><a href="/tags/vermont-law-school">Vermont Law School</a><span class="pur_comma">, </span><a href="/tags/environmental">Environmental</a><span class="pur_comma">, </span><a href="/tags/law">law</a><span class="pur_comma">, </span><a href="/tags/wind">Wind</a><span class="pur_comma">, </span><a href="/tags/solar">Solar</a><span class="pur_comma">, </span><a href="/tags/conservation">Conservation</a><span class="pur_comma">, </span><a href="/tags/efficiency">efficiency</a><span class="pur_comma">, </span><a href="/tags/storage">storage</a><span class="pur_comma">, </span><a href="/tags/carbon">carbon</a><span class="pur_comma">, </span><a href="/tags/global-warming">Global warming</a><span class="pur_comma">, </span><a href="/tags/climate-change">Climate change</a><span class="pur_comma">, </span><a href="/tags/co2">CO2</a><span class="pur_comma">, </span><a href="/tags/stinson-morrison-hecker">Stinson Morrison Hecker</a><span class="pur_comma">, </span><a href="/tags/renewable-portfolio-standards">Renewable portfolio standards</a><span class="pur_comma">, </span><a href="/tags/rps">RPS</a><span class="pur_comma">, </span><a href="/tags/hydroelectric">Hydroelectric</a><span class="pur_comma">, </span><a href="/tags/so2">SO2</a><span class="pur_comma">, </span><a href="/tags/cap-and-trade-0">cap and trade</a><span class="pur_comma">, </span><a href="/tags/decoupling">decoupling</a><span class="pur_comma">, </span><a href="/tags/maryland">Maryland</a><span class="pur_comma">, </span><a href="/tags/great-plains">Great Plains</a><span class="pur_comma">, </span><a href="/tags/federal-energy-regulatory-commission">Federal Energy Regulatory Commission</a><span class="pur_comma">, </span><a href="/tags/1000">1000</a><span class="pur_comma">, </span><a href="/tags/cape-wind">Cape Wind</a><span class="pur_comma">, </span><a href="/tags/weeks">Weeks</a><span class="pur_comma">, </span><a href="/tags/marine">Marine</a><span class="pur_comma">, </span><a href="/tags/shale">Shale</a><span class="pur_comma">, </span><a href="/tags/consumer-advocates">consumer advocates</a><span class="pur_comma">, </span><a href="/tags/keystone">Keystone</a><span class="pur_comma">, </span><a href="/tags/canadian">Canadian</a><span class="pur_comma">, </span><a href="/tags/tar-sands">tar sands</a><span class="pur_comma">, </span><a href="/tags/bitumen">bitumen</a><span class="pur_comma">, </span><a href="/tags/greenhouse-gas">Greenhouse gas</a><span class="pur_comma">, </span><a href="/tags/north-dakota">North Dakota</a><span class="pur_comma">, </span><a href="/tags/enbridge">Enbridge</a><span class="pur_comma">, </span><a href="/tags/wetland">wetland</a><span class="pur_comma">, </span><a href="/tags/bp">BP</a><span class="pur_comma">, </span><a href="/tags/kalamazoo">Kalamazoo</a><span class="pur_comma">, </span><a href="/tags/lac-megantic">Lac-Megantic</a><span class="pur_comma">, </span><a href="/tags/railroad">railroad</a><span class="pur_comma">, </span><a href="/tags/hazmat">hazmat</a><span class="pur_comma">, </span><a href="/tags/alberta">Alberta</a><span class="pur_comma">, </span><a href="/tags/chicago">Chicago</a><span class="pur_comma">, </span><a href="/tags/water">water</a><span class="pur_comma">, </span><a href="/tags/benjamin-sovacool">Benjamin Sovacool</a><span class="pur_comma">, </span><a href="/tags/thermoelectric">thermoelectric</a> </div>
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Thu, 03 Oct 2013 14:03:55 +0000meacott16822 at http://www.fortnightly.com